yet another hypothetical question - share buy backs
Discussion
Like they say, if you don't ask you don't learn...
Anyway, express donuts international is owned by two people, each with a 50% share holding. Now, person A is as happy as larry, person B is unhappy and wants out.
Person A can't/won't buy B's shares.
Can person B sell the shares back to the company, leaving A with 50%?
Anyway, express donuts international is owned by two people, each with a 50% share holding. Now, person A is as happy as larry, person B is unhappy and wants out.
Person A can't/won't buy B's shares.
Can person B sell the shares back to the company, leaving A with 50%?
I know because about ten years ago I had to rescue a client who had allowed his co-shareholder to sell his shares back to the company for a "sum". He thought it was a neat idea which would result in a tax free lump sum into his hand.
Luckily for us, the Revenue were willing to give retrospective permission - although I wouldn't count on such a lenient approach every time.
Luckily for us, the Revenue were willing to give retrospective permission - although I wouldn't count on such a lenient approach every time.
I don't understand.....
In the 1st scenario with 2 shareholders who own 50% each of the company... who is person B selling the shares to?
The company?
The company owns the shares of itself....and is it's own 50% shareholder? wwaaaaa??? How is person B PAID? Can someone elaborate on this?
In the 1st scenario with 2 shareholders who own 50% each of the company... who is person B selling the shares to?
The company?
The company owns the shares of itself....and is it's own 50% shareholder? wwaaaaa??? How is person B PAID? Can someone elaborate on this?
Person B decides he/she no longer wants to own some or all of the shares he/she currently owns. He says to the "company" - give me £10,000 (say) and I'll tear up the share certificates i.e. the shares will no longer exist. So, the number of Issued Shares will be reduced by the number of shares which have been "cancelled". The dispooser of the shares will be subject to Capital Gains Tax on the difference bewteen what the shares originally cost him/her less the proceeds and ancillary costs of disposal, indexation, taper relief, personal CGT allowance etc.
Eric Mc said:
Person B decides he/she no longer wants to own some or all of the shares he/she currently owns. He says to the "company" - give me £10,000 (say) and I'll tear up the share certificates i.e. the shares will no longer exist. So, the number of Issued Shares will be reduced by the number of shares which have been "cancelled". The dispooser of the shares will be subject to Capital Gains Tax on the difference bewteen what the shares originally cost him/her less the proceeds and ancillary costs of disposal, indexation, taper relief, personal CGT allowance etc.
Well that's interesting - I didn't know that. I thought the default setting was that a company can't finance the purchase of its own shares? My business is selling companies to other trade buyers, so my knowledge of the above is pretty minimal.
Gassing Station | Business | Top of Page | What's New | My Stuff